Calculate vehicle depreciation over time with make/model adjustments, mileage impact, and residual value estimation by year.
Depreciation is usually the largest single cost of owning a car, and it is front-loaded: the steepest dollar loss lands in the first year or two, not spread evenly across the vehicle's life. This calculator projects a vehicle's value year by year from purchase price, make and model, and mileage, so you can see what it will be worth at any age you choose. Users are most often surprised by how little cars retain: five-year-old vehicles are commonly worth only about 40 percent of their new price, so the car loses more in its first few years than most owners expect.
A concrete input and expected output from the current implementation.
Input
Purchase price $30,000, depreciation rate 20% per year, sold after 5 years
Expected output
Year-by-year value: $24,000 / $19,200 / $15,360 / $12,288 / $9,830.40. Retained value after 5 years: $9,830.40 (32.8%). Total depreciation: $20,169.60 (67.2%).
At a constant 20 percent declining-balance rate, each year's value is 80 percent of the previous year's, so year five is 30,000 x 0.8^5 = 9,830.40. The arithmetic is exact for any rate you enter; the calculator's default rate for your make and model may differ from the 20 percent used here.
Each year's value is the previous year's value reduced by the depreciation rate, so early years lose the most dollars even when the percentage stays constant. Make and model adjustments shift the rate: trucks and certain brands are known to hold value better, while luxury and niche models typically fall faster. With a constant rate, residual value at age N is price x (1 - rate)^N.
Mileage is scored against an expected annual baseline, commonly around 12,000 to 15,000 miles. Vehicles above the baseline lose extra value for the excess miles; vehicles below it are worth more than the age-only projection. The adjustment is applied per mile, so a three-year-old car with 40,000 miles can be worth thousands less than an otherwise identical one with 24,000 miles.
Usually yes in dollars: 20 percent of $50,000 is a larger loss than 20 percent of $25,000. But the percentage varies by category and brand. Trucks and some SUVs hold value well, while many luxury sedans lose a larger percentage on top of a larger price, so compare percentage loss, not just dollars, when choosing between vehicles.
It becomes actual money only when you sell or trade in: you recover the projected value, not what you paid. While you own it, the car costs nothing in cash, yet depreciation is typically the largest ownership expense over time, and financing makes it felt early because a new car's loan balance often exceeds its market value in the first year or two.
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